ANGELA WEISS/AFP via Getty Images 2025 may have been the start of the end of America's outperformance, a strategist says. Lazard's Ron Temple pointed to concerns about the Fed's credibility and the US debt pile. Investors may start to shift away from the US dollar first in currency hedges, he said. This year might be remembered as the end of a distinct era in markets. Lazard's top strategist said said he believes 2025 marked the beginning of the end of American exceptionalism in financial markets ...

US stocks opened muted on Friday as a holiday-shortened week and downbeat month drew to a close and as the Chicago Mercantile Exchange resumed trading following a data center glitch. The tech-heavy Nasdaq Composite (^IXIC) led stocks lightly upward on Black Friday, gaining around 0.4% in the first minutes of trading. The generalist S&P 500 (^GSPC) and Dow Jones Industrial Average (^DJI) both rose by a bit more than 0.2%. The CME Group restored operations after a long outage disrupted live trading in futu ...

Core Insights - The recent market dynamics have been labeled as the "debasement trade," driven by concerns over budget deficits, high inflation, and the declining dominance of the US dollar [2][5]. Group 1: Market Dynamics - Investors are increasingly purchasing hard assets such as gold, silver, and cryptocurrencies, which are perceived as beneficiaries of a weakening dollar and persistent inflation [3]. - The selling side of the debasement trade includes a decline in currencies and government debt, particularly noted in Japan with the yen and sovereign bonds selling off due to political changes [4]. - Central bank stimulus globally is reinforcing the debasement narrative, as low interest rates and money printing raise inflation concerns [5]. Group 2: Inflation and Interest Rates - Rising inflation may lead to rate hikes, which could heighten concerns over sovereign debt, although the sell side of the debasement trade is not as pronounced in the US, where Treasurys have been rallying [6].

Group 1 - Foreign holdings of US Treasurys reached a record high of $9.159 trillion in July, marking a nearly 9% increase year-over-year [1] - Japan's Treasury holdings increased to $1.151 trillion, the highest since March 2024, making it the largest non-US holder of Treasurys [3] - UK investors raised their Treasury holdings to just under $900 billion, reflecting a 5% increase from June [4] Group 2 - China's Treasury holdings fell to $730.7 billion, the lowest level since December 2008, indicating a strategic shift away from reliance on the US dollar [2] - The reduction in China's Treasury holdings has been gradual over the past decade, influenced by both strategic and market factors [2] - Foreign investors sold $16.3 billion in US equities in July, following significant inflows of $163.1 billion in June [5]

Core Points - US stock futures increased following the Senate's confirmation of Stephen Miran as a Federal Reserve board governor, coinciding with a record-setting day on Wall Street [1][2] - The Senate confirmed Miran with a narrow 48-47 vote, positioning him to influence interest rate decisions during the upcoming Federal Reserve policy meeting [2] - Miran's intention to take a leave of absence from his White House advisor role raises concerns about the independence of the Federal Reserve, especially amid President Trump's efforts to dismiss Fed governor Lisa Cook [3] Market Reactions - The S&P 500 and Nasdaq Composite reached new highs during day trading, driven by positive sentiment from ongoing US-China trade talks and expectations of a Federal Reserve rate cut [4] - The Federal Reserve's upcoming decision on interest rates is the main event of the week, with traders anticipating a 96% chance of a 25 basis-point cut due to labor market slowdowns [5] Economic Indicators - Investors are awaiting retail sales figures to gauge consumer performance amid persistent inflation and a fluctuating labor market [4] - The anticipation of a Federal Reserve rate cut has led to a bullish outlook in the bond market, with US Treasurys outperforming global peers [6]